Paris, 6 June 2006
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Following three consecutive years of declines in RevPAR, the Spanish hotel
industry is finally posting positive results (a 5% increase in RevPAR in
late April)
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This growth was twice as rapid as European growth in late April 2006
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Thanks to the very competitive conference and seminar segment, which is
enjoying a boom, Madrid and, to a greater extent, Barcelona, have gained
market shares from traditional destinations. For example, the 3GSM World
Congress, previously held in Cannes, has boosted results in Barcelona:
a 20% increase in RevPAR in February.
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Annual Variations in RevPAR in Spain and Europe*
Source: MKG Consulting Database � official supplier to hotel chains
� May 2006 Hotelcompset
ADR and RevPAR are expressed in euros inc. VAT
*Europe = European Union of 25
Following three consecutive years of decline, Spain finally climbed
out of the red in late April 2006. As in other European countries, 2003
was a bad year for Spain (-4.2% in RevPAR). Whereas Europe saw an upturn
in the following year, however, Spain registered
some of the worst results on the Continent in 2004, and was unable
to recover in 2005.
The reasons behind these bad results are well known. Firstly, hoteliers
have suffered from problems of overcapacity. Developers have been particularly
active and Spanish hotel supply increased by 20% between 2001 and 2005
(whereas supply grew by less than 1%
in France and fell by 2% in Germany and 5% in the United Kingdom during
the same period). Secondly, the Madrid bombings worsened an already precarious
situation in 2004. Finally, competition from emerging countries in the
Mediterranean Basin penalised
resort hotels, which are too numerous along the Spanish coastline.
Since mid-2005, however, hoteliers have seen considerable improvements
in their results and therefore posted a 5% increase in cumulated RevPAR
over twelve months. This growth was twice as rapid as that of the European
hotel industry.
Various factors explain the upturn in the Spanish hotel industry:
| Highly dependent on economic growth, the hotel industry, and the 3*
and 4* categories in particular, have benefited from strong growth in GDP.
By the end of 2005, for example, growth in GDP had reached 3.3% in Spain
and 1.7% in the European Union. Responding to high domestic consumption
in particular, this growth benefited the Spanish hotel industry fully. |
| Madrid and Barcelona, the locomotives for the Spanish hotel industry,
have finally overcome the difficulties that these markets had been experiencing.
Although April 2006 posted a decline in RevPAR (as compared to very good
results in April 2005), Barcelona has consistently improved its monthly
results since November: +1.9% for RevPAR in November, +6.7% in December,
+13.5% in January, +20% in February and almost as much in March. Madrid
has now totally overcome the consequences of the terrorist attacks of 2004
and even closed the year with an increase in RevPAR (+2.9%) in 2005. These
trends were confirmed in the first trimester of the year with an increase
in RevPAR that neared double figures. |
| The third factor is that Spain has been consistently gaining market
shares from its European neighbours in the conference and seminar segment.
Spain is yet to host as many international trade fairs and congresses as
France and Germany, but it now has very competitive infrastructures at
its disposal. Barcelona, for example, has had at its disposal since 2004
a convention centre which totals 100,000m2, the CCIB, which hosted the
3GSM World Congress, the flagship event in the mobile telephone industry,
this year for the first time. This event was previously held in Cannes,
France. |
| The fourth factor is that visitor numbers in Spain have increased greatly
in recent years due to the boom in low-cost airlines in particular: Iberia
recently announced the creation of a new airline, whereas growth in the
air traffic of low-cost airlines flying to and from Spain is very strong. |
| Finally, the country is reaping the rewards of promoting the destination:
the French Minister of State for Tourism has stated that spending on tourism
promotion is five times higher here than in France. The Spanish government
invests approximately 150 million euros in promoting the destination per
annum, in addition to approximately 230 million euros that are invested
by private organisations. |
Problems of overcapacity have not, however, been confined to the past.
Several projects should get off the ground over the coming years. Nevertheless,
the market remains very divided. The market leader, Sol Melia, does indeed
account for over 40,000 rooms, but
trailing behind, the other groups, with the exception of TUI, account
for less than 20,000 rooms. If the upturn in hotel results in Spain is
confirmed over the coming months and years, it may lead to an important
concentration movement as in countless other
operations in the United Kingdom and France last year.
Methodology
MKG Consulting is the European leader in consulting services
in the hotel, tourism and catering sector and has the largest hotel database
in the world outside the United States, with good representation of all
hotel segments. The monthly program of the MKG Consulting Database is based
on a sample of 10,000 corporate chain hotels, accounting for 1,000,000
rooms (the sample increased by 10% in 2005).
Since September 2004, the MKG Consulting Database has
proposed a program that enables activity indicators to be monitored hotel
by hotel on a daily basis. This program includes 1,500 hotels and 125,000
rooms in France, making it the most developed program charting daily hotel
results in Europe.
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